Dalglish has seen Liverpool exit the FA Cup and Europa League since taking charge until the end of the season following Roy Hodgson's departure, but their league form has improved and the 2-0 win at Sunderland on Sunday keeps their faint hopes of returning to Europe next season alive.

"He has done very well," Henry said in the Daily Mirror. "It's all very positive. Someone was saying that people weren't happy here, but I think since that person left people are happier."

On Dalglish's future, he added: "What is going on in that regard is private. It is something called the Liverpool way and you do these things behind closed doors. I am not going to talk about these things."

Henry accepted that - with a four-point gap to make up on Tottenham having played an extra game - it will be difficult for Liverpool to qualify for the Europa League but feels they still have a chance.

"We will have to have a lot of days like [the victory at Sunderland] to do that," he said. "Tottenham are in fifth and they look very good so we will have to play extraordinarily well, and we will have to win when they come to Anfield to have a shot at that, but we will do our best."

Dalglish, like Henry, has been reluctant to discuss his future in public and dismissed recent stories in the press about the contract negotiations.

"I have seen I have asked for four years," Dalglish said. "Well, I don't know who I am supposed to have asked. I have seen I was offered two - don't know where that has come from.

"People ask if I have spoken to the owners and of course I have. I speak to them regularly every week. It is their club, and they are fantastic owners, very supportive. There have been no detailed discussions about next season.

"Until there is something to be said, there is nothing. For me that is not a problem. For me, the club is most important, bar one instance when I left the club last time. There is no pressure on anyone."